5 Common Real Estate Investing Mistakes You Should Avoid
Real estate is undoubtedly one of the most recommended and safest investments that anyone can consider. Owing to the constantly growing demand for good housing in cities, you can be assured of a good return on investments from real estate. However, if you are new to real estate investments, it is highly imperative to know the most common investment mistakes that people make while planning to buy a property. Being informed about these mistakes will help you to make the right choices and avoid situations that can cause financial loss.
So let us discuss the 5 common real estate investing mistakes you should avoid.
1. Not doing proper research
This is one of the most overlooked aspects of property investment. Prior to investment, you must first analyze the market conditions and conduct thorough research of the prevailing property rates in the desired location. Without proper knowledge and understanding of the market, chances are more that you may get deceived by brokers or fraudulent agents. Once you shortlist a few properties, you must check aspects like location benefits, land value, rental demand, road connectivity, nearby facilities, builder’s history, etc. Various aspects like lack of water supply, air pollution, poor transport facilities and civic amenities can affect your investment if they go unnoticed.
2. Not estimating your financial capability
Nothing is as important as evaluating your finances when entering a new investment deal. Apart from the major expenses like the cost of the property, taxes and registration fee, there are many other hidden costs involved in property investment. If you are buying a house you have to consider maintenance costs, cost of furnishing and interiors, cost of repairs if any, utility charges, etc. Prepare a detailed document of the expenses and check whether you can afford it. If you are planning to take a home loan, then you must consult with a bank to know your eligibility. Having a good credit score will help you get a loan at lower interest rates and longer repayment tenure. A credit score of 700 or above is considered to be good and increases your credibility to get a loan.
Check out the interesting article to know How credit score impacts home buying process.
3. Not checking the builder’s reputation
Choosing a reputed and trusted real estate developer ensures the credibility of your investment. A renowned real estate brand will procure all relevant legal permits and documents required for property sale. They also ensure that their projects are approved by RERA to ensure transparency in all transactions. Moreover, a well-experienced developer will always go that extra mile to satisfy their customers. If you are buying a home or an apartment from a reputed brand, you can be assured of good quality construction and excellent customer service. You can visit the company website, social media pages and project sites to get a complete picture of the developer. Alternatively, you can also seek feedback from previous customers or buyers to check the builder’s reputation.
4. Not choosing the right type of property
Once you have made a decision to invest in real estate, you should also decide which type of property you are going to invest in. You can either buy a residential property or invest in a commercial space. Most of the first-time investors tend to overlook this aspect because they may not have much idea about the real estate market. Choosing the wrong property can put your money at risk and result in dead investments. Consider buying properties in prime locations as they will always have great demand. Also, look for in-house amenities and civic facilities nearby the property. You can get good resale value and returns from such properties. Depending on your budget and purpose, shortlist a few properties and seek help from a trusted property advisor to find the right bet.
5. Not seeking expert advice
Most investors don’t consider seeking professional help for real estate investments. They think that they can be successful investors even if they don’t talk to any industry experts. But this may put them in trouble later on for there can be many unknown issues associated with properties. Interacting with a reliable property advisor will not only save you from fraudulent offers but will also ensure that your property is free of legal issues. An experienced real estate agent can find you a good property at a fair price deal. Also, it is always ideal to consult a financial advisor to plan your expenses and prepare yourself for the investment.
We hope that these insights have given you a good understanding of the common mistakes in real estate investing and how you can invest smartly in property. Now it’s your turn to explore the opportunities and be a smart investor!